My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved accordingly, and, on Question, Motion agreed to.

House in Committee accordingly.

[The DEPUTY CHAIRMAN OF COMMITTEES (Viscount Allenby of Megiddo) in the Chair.]

Clause 3 [Power to make arrangements for the provision of probation services]:

moved Amendment No. 38:

Clause 3, page 3, line 21, after "contractual" insert "negotiated partnership"

For the convenience of the Committee, I propose to speak to Amendments Nos. 39 and 40 as well. I should first make it clear that I have worked for much of my life in the voluntary charitable sector and am still a trustee to a number of organisations in that sphere.

Perhaps I could say a brief word about Amendment No. 39. If we are talking about relationships between government institutions, the public sector and, for example, the voluntary sector, it is terribly important to understand the nature of governance in the voluntary sector. It is very important that the language should be clear to those who operate within its culture. While I quite understand what is intended in terms of accountability and the rest, to refer simply to "a person" is confusing for the voluntary sector. Its great strength is that it indulges in meaningful collective leadership in which trustees, for example, are individually and collectively responsible for everything the charity does, everything it says, and all its expenditure. To include words such as "institution" would be helpful in making clear what is really involved in a genuine working together.

I have a few more words to say on Amendments Nos. 38 and 40. I am a little troubled that we are going rather far in a new concept of the voluntary sector—and, indeed, charitable organisations within it—having a primary role as subcontractors to government with whom contracts are made because they can deliver, to their credit, efficiently, sensitively and more cheaply than the public sector itself.

My anxiety is that we will throw the baby out with the bathwater. In our history, charities and voluntary organisations have been about a great deal more than that. They have, at their best, been about leading in social responsibility, creating, by their pioneering work, a situation in which society as a whole faces up to responsibilities and moves in. They have a catalytic role. It therefore seems to me that when a relationship is being struck in the context of the Bill between the Government or their agents and the voluntary sector, it has to be a negotiated partnership. The best NGOs—if I can put it that controversially—will not make bids simply to get contracts. They will make bids because they are concerned about work in that sphere and because they believe that they can bring additionality and that they have special insight and qualities to offer in meeting the need. It should be very clear that in undertaking a relationship, there has been a genuine dialogue and that the conclusion about the nature of the relationship is mutual and shared by both, with as few reservations as possible, preferably none.

I referred to this at Second Reading, when I drew attention to a voluntary organisation with which I had been associated. It had been doing work in a young offender institution and its contract was to get people into jobs. It was marked under the competitive bidding system by its success in getting people into jobs, but it was concerned about the pressure that came to bear on it when it could see that some of the people with whom it was working were not yet ready and that a lot more support was needed before they could be shoved into a job, which would probably have been a counterproductive experience if more work had not been put into preparing them. It was going to lose points. It received absolutely no credit for the work that it did in counselling. There must therefore be a spirit of imagination, flexibility and room for adjustment in the way in which this co-operation is undertaken. There has to be a working partnership, and not simply a detailed contract, cast in stone, by which the voluntary organisation will be judged.

There is a further anxiety. It is a controversial point and it is only right to make it in the context of this debate. Among some of the better NGOs, with a history of working in spheres such as this and with real concern, insight and experience, there is an anxiety about—how should I put it?—less reliable NGOs springing up, largely motivated by the concept of getting contracts to undertake government work. Due to their more limited and narrow approach, such NGOs might well be able to underbid organisations that, by their nature, will have a more professional, considered and thorough approach to what they are undertaking. That is why I have proposed these two amendments. They are obviously probing amendments, but I hope that my noble friend, with all her personal experience, quite apart from her ministerial responsibilities, will accept my point and be able to make some reassuring observations when she replies. I beg to move.

I am most grateful to the noble Lord, Lord Judd, for raising this important point. We on these Benches certainly share his high regard for the work of NGOs in many fields. I listened with great interest to the definition of "negotiated partnership" that was presented. While partnership between probation providers of all sectors is greatly to be encouraged in principle, the best way of achieving this is through contestability—I acknowledge the noble Lord's concern about the less worthy applicants. Nevertheless, my noble friend Lady Anelay will speak at much greater length on the role of charities. In responding to the noble Lord's amendment, I note that improvements are clearly due in the way in which contracts with charities are made and implemented, including the arrangements for, and consistency of, funding. It is important to get these matters right in the context of making contractual arrangements through contestability, but I suspect that the noble Lord's amendment, in widening the way in which agreements are made to extend to negotiated partnerships, would drive a coach and horses through contestability.

We on these Benches have a great deal of sympathy with the amendment. It opens up the question of the future relationship between commissioners of probation services and the various bodies from which they commission, be they private, for-profit providers or non-governmental organisations. As the noble Lord, Lord Judd, remarked, the not-for-profit sector—the charitable bodies—has divided views on this.

I recognise in the language of the Bill all the terminology of new public management, which the Minister, too, uses with relish. There are contractual relations between the principal and the agent. The agent who provides the services is in a purely executive, thus subordinate, role. The principal sets the terms of the contract in targets, performance measures and other metrics. There are bonuses for good performance and penalties for bad performance. One has to ask whether, in relations between commissioners of probation services and charitable bodies, that is the correct relationship. We are talking about local provision of services for offenders, so we are at the heart of what probation is about.

For the private sector, this is entirely correct, but the problem that we need to address is whether one should treat the private and charitable sectors in exactly the same way and thus risk reducing the charitable sector, as the noble Lord, Lord Judd, said, to being merely a provider of services in an executive capacity to commissioners who entirely set the agenda.

I, too, support the noble Lord, Lord Judd, in his amendment. As the Minister knows, we are all with her in the ambition of what she seeks to achieve, but the question is the method. We have frequently drawn attention to the need to listen to the voice in the field. My contribution is based on six short statements made on 2 May in a keynote speech to the Probation Centenary conference by Ellie Roy, the chief executive of the Youth Justice Board, entitled "Commissioning—the Youth Justice Experience". My concern, in line with what the noble Lord, Lord Judd, said, is that a great deal of this Bill flies in the face of the practical experience of the Criminal Justice Board. I want to read the statements made in the speech, because I think that they explain why. Ellie Roy said that,

"you need as a commissioner to be able to work with your providers to look at how you want to change things, what is actually going to be achievable and you ... need to listen to the real operational concerns and operational issues which your providers tell you about and you need to give them discretion in how they actually deliver a lot of the services".

The risk is that,

"you can set out on a process which initiates some huge upheaval in the services that you're responsible for or that you're trying to change and you may do that against very weak data and a weak evidence base and you may then not be in a position to make a sound judgement on the results".

She remarked that,

"one of the things that as a commissioner you've got to remember is that you do have providers in the field who know their business and know it well, who have experience and expertise and you need to work with the grain of that rather than coming in and thinking that you can tell people exactly what to do and what changes need to be put in place".

She also said:

"As a commissioner you should be able to use contestability to select the best provider who will provide best service for the lowest cost. But again, it's not as straightforward as it seems. Some of the constraints that we face are, first of all, lack of new money to invest in any transformational change. Everybody knows how constrained the public purse is at the moment and we have to make the money that we've got work to change and that gives us some real problems because if we wanted to rebalance the costs across the three sectors"— that is, the public, the private and the voluntary—

"there are some real issues around that, particularly in terms of the expertise and experience", that some have,

"and the fact that they deal with the most vulnerable populations ... so we have to think very long and hard about that".

She also pointed out:

"It's very difficult as a commissioner, to judge the ability of competing providers to deliver a quality service. What looks good on paper in a bid is not always deliverable and it is difficult to judge whether too many corners have been cut and some of the bids that come forward ... are actually as robust as they seem in the reality. For us, we are actually dependent on monopoly suppliers whether we like it or not and there are some real risks in moving beyond those suppliers".

She sums up:

"The conclusion that we've come to"— that is, the Youth Justice Board, over time—

"is that we really do need to work in partnership with the providers that we've got ... They ... have the experience and we need to work with them, and ... build a confident relationship, and ... trust between us, if we are going to see the change that we all want".

I do not think that you could put it more clearly or succinctly than that. If we think that we can push change in a different way, we are deluding ourselves.

I share all the concerns that lie behind this group of amendments. However, I want to raise a slightly different point. Commissioning of probation and similar services outside the Probation Service will not occur until 2010, but it is very important for us to be clear in our minds now how it will work. The length of contracts will be very important, whether for privately supplied services or for work done by voluntary organisations. Such bodies will have to recruit and train staff and will then have to do the necessary work and provide the necessary services for the prevention of offending. Even when that work is completed, it seems to me that another two years will be required before it can be seen whether the treatment, supervision or support has been effective in reducing reoffending.

In this connection, it seems to me that an expensive course may be worth while if it is very effective whereas a cheap course may constitute money badly spent, and possibly wasted, if its results are negligible. Therefore, anything that the Government can say about the length of contracts that they envisage will be very helpful. I reinforce the points already made by my noble friend Lord Ramsbotham.

I support these amendments. I wish to comment particularly on Amendments Nos. 38 and 40, which concern negotiated partnerships. There are enormous difficulties involved in contracting out human services that are intended to deliver care of other human beings. I think that the noble Lord, Lord Judd, will agree with me that the inquiry of the Joint Committee on Human Rights into the care of elderly people has highlighted the great difficulty that local authorities have in contracting for the care of elderly people and building values and flexibility into contracts. It is easy to state in a contract, "The floors must be very clean and so they must be swept every day, preferably between nine and 10". It is more difficult to state, "Sweep the floors between nine and 10 but if an old lady is crying and is deeply upset stop sweeping the floors, put your broom away and care for the old lady". It appears that we are not yet very good at drafting contracts that lead to such outcomes.

The Chief Inspector of Prisons, Anne Owers, produced an interesting report on Doncaster prison, I think; I hope that I shall be forgiven if that is not correct. It was pointed out that various matters that were not in the contract were not being dealt with. The contract did not state that lavatories had to have seats, so they were not replaced. It did not state that beds had to have pillows, so they were not replaced. That highlights another difficulty: how long should a contract be and what should it specify in order to achieve the outcomes that I am sure we all want?

How can you, in a contract, deal with innovation? How can you go back to your contractor and say, "We have learnt that this should be done differently"? That is very well expressed in the contribution by Ellie Roy, the chief executive of the Youth Justice Board, which the noble Lord, Lord Ramsbotham, has already referred to. She said:

"It is easier to get change where you have a service level agreement which is more fluid than it is with formal contracts. Where we have formal contracts with the private sector, there are real challenges about getting change in those and there is invariably a cost involved because you have to go through a formal re-negotiation of the contract and there are costs to making changes".

However, a partnership is a very different relationship. A partnership is based on people saying, "We will work together. We who are giving you the money and you who are doing the work will work together. We promise to be flexible if you come to us saying that something needs to change, and you need to be flexible if we come to you saying we have decided that there is a better way of doing this". I cannot understand how there is any other way of delivering what the Minister has said to us more than once that she wants, which is that this should be based on the needs of the people who come for the service. One assumes that the people will be different every week and every month. How can the service be based on a rigid contract? There is going to be a need for a much more flexible approach.

On our first day in Committee, I referred to the paper by the University of Glasgow and the eight points summarising how people come to give up crime. I remind the Committee that one of them is that,

"offenders are most influenced to change ... by those closest to them and those whose advice they respect and whose support they value".

That implies working with local groups, neighbourhood organisations and groups of people in the community from which the offender has come. It is highly unlikely that such small organisations will be able to enter into the sorts of contractual relationships that commissioning envisages. I support the amendment.

The Committee will know that we on these Benches do not normally have two Front-Benchers coming in on one amendment; it is not a practice that we like to pursue. With the indulgence of the Committee, I rise only to ask a specific question that has nothing to do with the way in which my noble friend responded to the amendments. I want to ask for clarification on a matter raised by the noble Lord, Lord Hylton. When he spoke, I understood him to say that he appreciated that probation services would not be put out for contestability in 2010. The noble Lord, Lord Hylton, is helpfully nodding his agreement. It was my understanding that the Government's commitment to delay putting out services to contestability until 2010 related only to those core services given protection in Clause 4, and that the Government had not bound themselves with regard to other services that might be opened up to contestability before 2010. I would be grateful if the Minister could clarify that point.

If it is any help, page 3 of the Home Office NOMS May 2007 reducing reoffending strategy says that it will be 2010.

I appreciate that. I am relying on the text of the Bill and the commitment given by the Home Secretary in another place. The noble Lord, Lord Hylton, has made an important reference, and it is right that we should have a clarification at the Dispatch Box.

I am grateful to the noble Baroness and the noble Lord, Lord Hylton, for asking for clarification. I will try to deal with that matter during my response.

I thank my noble friend Lord Judd for tabling the amendments and pay tribute to him for the incredible work he does in the voluntary sector and for the powerful insights that he brings to our debates. Too often, we lose that and fail to understand the wealth of experience of noble Lords who speak on this subject. As I waited while noble Lords made their points, I reflected that this House benefits greatly from that experience. We should look at some of these issues in that spirit of informed criticism and engagement, because they are important and I understand that people who work in the different services are nervous as we as a government continue to encourage the commissioning role and other forms of contestability. I understand the sensitivity of these issues and their importance to how the services will develop.

We have discussed this matter in the past and there is not actually a great deal of difference between most of the contributors to this debate. We are all trying to get to the bottom of these issues. As I listened carefully to the noble Lord, Lord Ramsbotham, when he quoted Ellie Roy of the Youth Justice Board, I did not think that we were in great disagreement. We obviously need to address the issues raised in those comments, and we feel that we are doing so and that there is no difference between us. Our experience of the contestability process over the years and the way that the Youth Justice Board has worked have served us well in informing our approach to probation services and how they develop.

Clause 2 gives to the Secretary of State responsibility for ensuring sufficient provision for probation services, and Clause 3 sets out how he may go about that task. It enables the Secretary of State to make contractual or other arrangements with any person for the making of probation provision. Amendments Nos. 38 and 40 propose that these arrangements should be on the basis of "contractual negotiated partnership". In effect, this is the model that we intend to follow, whereby both regional and local commissioners will encourage joint bidding. The legislation already allows for this and we intend to take that forward through the commissioning and procurement processes. It is already very much part of our thinking. We are there. There is no disagreement between us and there is a comity of view. It is not really a matter for legislation, because we want to build on the basis of valuable and valued experience.

Amendment No. 39 relates to Clause 3(2), which enables the Secretary of State to make contractual or other arrangements with any other person for the delivery of probation services. I can reassure my noble friend Lord Judd that the definition of "person" in this subsection includes institutions or organisations. Those reassurances should perhaps satisfy my noble friend's concerns.

Today, my noble friend Lady Scotland and I visited drugs projects in my home city of Brighton. Much of that drugs-related work is commissioned and relies on contractual arrangements with NGOs—voluntary organisations. A wealth of experience is already out there in the drugs field, and that is where the flexibility and initiative required for tackling these profound problems rests. We rely on that sort of experience in taking forward this new approach to the development of probation services. We are not afraid to engage with that because we think that we can always learn lessons from it.

The process enables us to focus much more strongly on outcomes and, picking up some of the terminology in the debate, it is about cost-effectiveness and not just cost-efficiency. The service will benefit greatly from this new approach. We can rely on the experience that has already developed in other sectors within the criminal justice system and we are learning all the time.

The noble Lord, Lord Hylton, asked a specific question about contracts, and I understand his point. As part of my learning this morning, I asked the group of drug service-related contractors whether they felt bound by the length of their contracts. Their response was interesting. They said, "Of course we'd like a longer contract because that would create greater certainty, but we think that the length of contract that we have now is one that we can work with, and it has benefits because it enables us to focus on performance over that period and it enables those who commission to hold us properly to account". That is what we are attempting to achieve here.

With regard to the length of contracts, we are committed to replacing annual funding regimes associated with grants, which I am sure we all appreciate can at times have a stultifying effect, and we are committed to replacing them with multi-year contract terms to help to develop and maintain longer-term capacity. This is not a guarantee for all cases; in other words, it will need to be supported by evidence of what works and future demand data. However, the need for more sustainable funding terms is widely recognised by providers from all sectors.

That approach is very much in line with the 2004 spending review, which announced the introduction of full three-year settlements for local authorities. They now have the opportunity to cascade down this stability, where it represents good value for money to do so, through third-sector organisations. That is our general approach on length of contracts and funding arrangements.

The other question, to which the noble Baroness, Lady Anelay, drew attention, was also important and I shall try to provide some clarity on it. We have said that we will not contract for offender management outside the public sector before 2010. The Clause 4 concession relates only to court work. It is not time-limited and it can be lifted only by order. I hope that that clarifies the noble Baroness's point. I see the noble Lord, Lord Wallace of Saltaire, twitching; I think that he wants to ask a question.

Can the noble Lord define in the context of the Bill how the Government assess the difference between cost-efficiency and cost-effectiveness? That drives to the heart of the point made by the noble Baroness, Lady Stern. Cost-efficiency can be measured; cost-effectiveness, particularly when dealing with individual relations with offenders, is much more difficult to measure. How do the Government intend to ensure that cost-effectiveness is more than just cost-efficiency?

That is a fair point and I thought that I touched on it earlier. I said that it would be outcome-focused, because we would then be able to see what was happening with a particular service—the way in which it was developed and delivered and the changes that it made. This issue is about quality as well as cost, and that needs to be factored into our considerations.

I hope that I have answered the general points built around the useful amendment moved by my noble friend Lord Judd, which has triggered some interesting thinking. I hope that I have also responded in sufficient depth to some of the other points that were raised and that my noble friend will feel able to withdraw his amendment.

What the noble Lord, Lord Bassam, has said about when contestability can take place is important. He will appreciate that the commitments given by the Home Secretary in another place at Third Reading were not as clear as the statement he has just made. For example, on 28 February, the Home Secretary said that,

"the core offender management tasks of the probation service—for example, offender report writing, offender supervision and breach proceedings—will remain in the public sector for the next three years".—[Hansard, Commons, 28/2/07; col. 1023.]

He went on to talk about the statutory instrument in Clause 12 being some time in the future. That has led to a great deal of confusion about when contestability will take place and what it will cover. I understood from the Minister that the Government's intention now is that no contestability can take place until after 2010 in any format whatever—perhaps, at the Dispatch Box, he would now confirm that none can take place—and that the core services that are protected in Clause 4, however they are defined, do not have a time limit on them. In other words, if this Government are still in power in three years' time, at the end of those three years, they would feel that they could seek, by statutory instrument, to withdraw that protection. If those two assurances are given, that may assist us in later deliberations on the Bill.

I am grateful to the noble Baroness for giving me the opportunity to provide further clarification. The work that the Probation Service currently does with offenders can be broken down into two broad categories: offender management and intervention. Offender management refers to the management of individual cases; it is the process of assessment and sentence planning, implementation, review and evaluation, which of course runs from the beginning to the end of an offender's sentence. Interventions are structured or planned pieces of work are identified in the sentence plan. Their purpose may be punishment, rehabilitation or public protection. Examples of that might include accredited offending behaviour programmes—such as sex offender and domestic violence programmes—curfews with electronic monitoring and unpaid work. We are committed to keeping the core offender management work within the public sector until at least 2010.

I think the Minister continues to say that contestability can happen from the moment the Bill is passed. That is not what was understood by the noble Lord, Lord Hylton, from his reading of the document to which he referred. I actually understood the position to be exactly as the Minister says, which is that contestability can happen from the moment that the Bill hits the statute book and becomes an Act, except with regard to the protected matters in Clause 4. We will come to the definition of those later.

I shall try to boil this down. There will be offender management from 2010 and interventions straightaway. That may help the noble Baroness and probably hits the nail on the head.

The recently resigned chair of the Youth Justice Board, Professor Rod Morgan, has said many times that the success of what he has described as the Youth Justice Board's mixed economy results from its burgeoning up from below. When looking at the Bill, we could be forgiven for assuming that the Government intend to impose their style of economy from above. The Minister implied that there was no difference between us, but there is, because I support what Rod Morgan has said rather than what I assume to be the intention of the Bill. Perhaps the Minister could explain which is the Government's intention.

I hesitate to suggest that the noble Lord, Lord Ramsbotham, is confusing some of the issues. This is not a matter of which side of the argument one agrees with or disagrees with. From the exposition that he gave earlier and from the comments of the chief executive of the Youth Justice Board, I had understood that we were at one with those comments and with the description of the process. I am not going to take sides in an argument over observations made by Rod Morgan because that would be quite wrong of me and would not help us to focus on the development of a new process of commissioning and on developing new services in a sensible, flexible, imaginative, intuitive way. I hope that the noble Lord, Lord Ramsbotham, comes with us on that journey. This is not about top down, but about making sure that the service is appropriate to what it is charged to tackle.

I do not think anyone offers any difficulty about going on the journey with the Minister, but my noble friend Lord Wallace of Saltaire asked a pointed question about the difference between care and something that can be measured, a point that was clearly demonstrated by the example given by the noble Baroness, Lady Stern. The Minister said that he has dealt with this matter, but I did not quite understand him, so I shall ask again: how can one have a satisfactory contractual arrangement if it cannot be measured?

These things can be measured. The noble Lord must know of the work of his colleagues in local government who have extensive experience in this sector. I wish the noble Baroness, Lady Howarth, were here this afternoon because I am sure that she could give much better chapter and verse than I can as I am now a little more distant from these things. How many times someone comes round and cleans can be measured, but the other element is the quality of the cleaning. Service care contracts are about that; they are about quality. Quality can be seen and felt, and that is what we will achieve through this process. I do not see the problem here. If the noble Lord reflects on his NGO and voluntary sector charitable background and work, he will see how these things can be measured in that context. I do not see that it is any different here.

I am grateful to all noble Lords who have spoken to this group of amendments. Some extremely interesting and important points have been made that underline the importance of the issue. I hope that the Government will think a bit more about what has been said and why it has been said before the Bill completes its passage through Parliament.

I appreciate the considerate way that my noble friend replied, and I am sure that he sincerely meant all that he said about the spirit in which the words should be interpreted. However, I have been around in politics a good deal, and if something is not spelt out clearly in the Bill, what may be the spirit now may evaporate in different circumstances. I hope my noble friend will forgive me for putting it this way, but he cannot have it both ways. If he really agrees with the significance of the points that have been made—and he suggested that he did—it behoves the Government to try to find some way of being more explicit in the Bill about what is intended. A Bill is about legislation, not spirit, but the words can set the tone and the context. At the moment, it is cold and precise in traditional language, and we are embarking on a new, exciting adventure—that is the message that we have heard from the Government all the time—in which everything will be improved because of this new approach and there will be partnership between the formal governmental machinery, government agencies and other organisations. That is a tremendously exciting concept and I believe it can bring tremendous qualitative improvements in the future. However, if it is going to happen, it has to be spelt out clearly that this is not just a matter of getting agencies to deliver what the Government have decided but defining together what really needs to be done and then, as the noble Baroness, Lady Stern, and others have said, in the context of experience being able to make adjustments as the partnership goes along, rather than persevering with something which has clearly not become as tenable as everybody thought originally it would be.

Given what the Minister said and the generous way in which he said it, it is terribly important that the Government should go away and think very seriously about the observations of the past 45 minutes. They should not just say, by way of a formality, "Yes, we have listened and we sympathise". They must recognise that, whatever their intention, the experience of the people in the front line has not been of the kind envisaged; it has been far more rigid and unimaginative, with leagues, scoring, points and all the rest. I will withdraw the amendment at this stage on the understanding that the Government were not just—I hate to say this, because I know very well that my noble friend would not want to do this—palming us off with smooth talk. We want the Government to go away, do some more work and see how they can come back with more imaginative wording that meets the point. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 39 and 40 not moved.]

moved Amendment No. 41:

Clause 3, page 3, line 35, at end insert—

"(d) to implement the general race equality duty under section 71(1) of the Race Relations Act 1976 (c. 74), through—(i) collecting and analysing relevant evidence,(ii) involving affected persons and organisations,(iii) taking actions through an equality action plan, and(iv) publicly reporting each year on their performance on race equality."

The purpose of Amendment No. 41 is to ensure that all those who provide probation services under this Bill are subject to the race equality duty, which has applied hitherto to probation boards. I am grateful to the Minister for tabling her amendment to Schedule 3, which I recognise may fully meet my concerns. The only reason why I have left my original amendment on the record is so that I can detail the concerns expressed to me by the Commission for Racial Equality and give the Minister the opportunity to explain how and why her amendment would address them.

I should make it clear to noble Lords at this point that, as they will see in today's Marshalled List, I have withdrawn several amendments. I did so to enable the Minister to lead on amendments where she has made concessions and where I felt that it was clear that everything that I had asked for had been met. Here, because I had been asked to table this amendment by the Commission for Racial Equality, I thought that, in due respect to it, I should ask the questions that it wished to have put.

I ask the Minister to address the general point made by the CRE that all organisations and persons, not just trusts, will be subject to the race equality duty, as in the amendment. The specific points raised by the amendment should be addressed. Will the government amendment require the providers of probation services and the trusts to do the following: first, collect and analyse relevant evidence; secondly, involve affected persons and organisations; thirdly, take actions though an equality action plan; and, finally, publicly report each year on their performance on race equality? If the noble Baroness can assure the Committee that the government amendment achieves that, will she explain how it will?

The CRE believes that the amendment is important because, without such a measure, there could be a race equality gap. It says that,

"the Bill in its present state will place no direct race equality obligations on the new probation trusts ... This would constitute a regression in practice from the current position of race equality duties applying to local probation boards".

Rightly, the CRE states that probation trusts matter for race equality because,

"the work of the new trusts is anything but trivial. In fact and in practice they will have major impacts on the life chances of those they serve".

It is also concerned about the quality of pre-sentence reports. In its view, in the Probation Service, there has been a long-standing issue with the quality of pre-sentence reports for ethnic minority offenders. It points out:

"HM Inspectorate of Probation's thematic inspection of race equality in 2000 concluded that the proportion of reports considered satisfactory or better was considerably higher for white persons than for African/African-Caribbean offenders in some areas".

Finally, it states that it hopes that its amendment is a,

"Light-Touch, Proportionate but Effective Amendment"— that sounds rather like government language. It states:

"The proposed clause is designed to be light-touch but effective, there to help the new trusts"— and all other providers—

"to take the essential steps towards good race equality practice".

Before I beg to move my amendment, I note the other amendments grouped with it. I note the amendment in the names of the noble Baronesses, Lady Gibson of Market Rasen and Lady Turner of Camden. I look forward to hearing them put their case because I anticipate that I will be able to support them. I beg to move.

Amendment No. 41A is in my name and that of my noble friend Lady Turner of Camden. The issue was brought to our attention by Unison and Napo, which both have members working in the area. The amendment has been introduced in an effort to ensure that the specific gender and disability duties should apply to all providers of probation services from day one of any contract. The general duty may well apply, and that is fine, but the specific duties carry clear responsibilities to act under the gender equality duty and the disability duty schemes.

As the Government have recognised in the past, diversity must be at the heart of all employment practices, as well as all public service decision-making and public service provision. As things stand, lists of provider organisations subject to the specific duties are updated annually. Therefore, there could be time lags between the point at which a contract is awarded and the application of the gender equality and disability equality duties.

The specific disability duty in the amendment will ensure that all providers publish a disability equality action plan and involve disabled people in its production; that will be implemented within three years and reviewed every three years. There will also be a duty to report on progress annually. Such a duty will ensure that disabled staff are protected and that all reasonable adjustments to practices, policies and properties are made. The amendment would also require probation service providers to implement the specific gender equality duty, which would again ensure that schemes were prepared, published and implemented within three years, reviewed every three years and reported on annually. I hope that my noble friend will view the amendment favourably.

I have put my name to Amendment No. 41A and I support Amendment No. 41. The duty involved in the amendment goes far beyond the simple hope of eliminating discrimination. It forces employers to act positively in all policies and practices, both new and old, and to address all gender issues in action plans. In the Probation Service, that would include ensuring that women offenders had the opportunity to meet women staff and be supervised by women staff, that the victims of domestic violence were offered services and that offender groups and unpaid work were also gender specific.

The amendments would impose on providers of probation services a duty to collect information that allows them to understand the impact of their work on black and ethnic minority people, disabled people, women and men. Providers would have to undertake to put their efforts and resources where those would have the most impact on race, disability and gender equality, and they would have to recognise that they must achieve outcomes in equality areas. They would have to consult relevant people both inside and outside the organisation, including voluntary and community organisations with specialist knowledge of race, disability and gender equality, to seek transparency of operation and to publish race, disability and gender schemes and associated action plans, consultations and the results of consultations. They would also have to monitor the results and impact assessments of current and proposed procedures. In other words, the amendments propose a positive programme for all these areas and I hope that the Government will be prepared to support them.

I support the amendments. It is absolutely crucial that all these elements are taken fully into account. No doubt the Minister will reassure us on this point when she replies. Let us consider the differences, particularly sex equality differences. So much interesting work is being done in women's prisons that would be very relevant if suitably adapted right across the prison sector, and indeed beyond. We need to be reassured that this is all very much part of the thinking behind the modern approach to the end-to-end management of offenders.

I, too, support the amendments. I shall speak particularly to Amendment No. 41A. Everyone is aware of the historical disadvantage experienced by women and disabled people, extending at times in the latter case almost to invisibility. The moral case for purposeful action to address continuing problems is thus clear. However, I wish to make the practical case, particularly for the disability provisions in proposed new paragraph (d), although my remarks apply equally, mutatis mutandis, to the gender provisions in proposed new paragraph (e).

An article was recently published on the BBC news website about the need for speech and language therapy in young offender institutions. A quarter of inmates in one institution had clinical communication difficulties. Research suggests that providing such therapy leads to a 50 per cent drop in reoffending. The more we get equality right, the better the outcomes, which is surely the object of the Bill. End-to-end offender management must include end-to-end provision for ameliorating disabilities. Amendment No. 41A relates to probation, but I hope that the Committee will entertain a parallel amendment on prisons when we come to that part of the Bill.

This is an area in which partnership working is essential. Every organisation must be equally committed, which is what the amendment would require. These equality duties would cover not only offenders but staff and volunteers, who would also be protected. This is important. A recent Disability Rights Commission report considered the disclosure of disability by public sector workers. The researchers found that many people would avoid disclosing a condition, particularly in mental health settings, because of the stigma of disability and the risk that they felt disclosure involved. This is bad for staff and bad for the organisation. Sadly, there is evidence that the importance of specific duties bearing on public authorities is not sufficiently grasped in the penal system.

A Home Office spokesperson, in a response to the article about speech therapy, complacently observed that people were usually incarcerated for too short a time to do anything useful and that in any case education was usually sufficient. Such attitudes need to be challenged and the amendments would challenge them. There tends to be equality only when there are specific requirements and transparency; hence the provisions about preparing and publishing disability equality schemes and action plans, about reviewing and revising the schemes at least every three years and about reporting on progress annually.

The Minister may feel that there is no need to include these provisions in the Bill because they exist by virtue of disability and discrimination legislation anyway. But, as I have just illustrated by reference to the Home Office reaction, that is clearly not enough. Many duties arise as a result of the general law. It is all too easy for individual duties to get overlooked. In the case of disability, which it would not be unfair to describe as a Cinderella among the areas where equality needs to be promoted, it is all too easy for the duty to become invisible, which is why it would be particularly helpful to have this amendment in this legislation.

I hope that this is uncontentious. I do not think that we have agreed any changes to the Bill as yet. This simple and straightforward amendment might give the Minister an opportunity to show how much she is listening to noble Lords and I hope that she accepts the amendment.

I welcome the amendment from the noble Baroness, Lady Anelay, and the noble Viscount, Lord Bridgeman. It has given the Government an opportunity to introduce Amendment No. 131. Having dealt with the Minister on equality matters ever since I came here, I have never doubted her commitment to racial equality. We are very grateful to her. I think that she will see why certain pointed questions are being asked. Equally, I have no doubt whatever that once the government amendment is included, the Commission for Racial Equality will be breathing down the Minister's neck to see that every aspect of what has been asked for—for which the Government will be accountable—is implemented.

It is important to have this debate because the Government's actions in recent times have caused me some concern. For example, in an immigration case recently, the judge and the courts ruled that the Government had failed to work out the racial equality impact on that immigration matter. I know that that is not relevant here, but, somehow, we seem to miss out. As with the proof that is required for our legislation in terms of human rights, there is a need to prove our legislation in terms of race equality, which is an essential part of our diverse society.

Yesterday, I asked the Minister about the UK Borders Bill. I am grateful for her assurance that an assessment will be made in due course to ensure that the provisions will apply appropriately to all citizens. However, before the legislation comes before this House, I am expecting some work to be undertaken on this implication.

I am also delighted with the amendment proposed by the noble Baronesses, Lady Gibson of Market Rasen and Lady Turner. I know both their records on equality matters and I am pleased that those issues have been highlighted, although I shall not refer to them.

No one in their right mind could ever object to these amendments, because Parliament has rightly established the Commission for Equality and Human Rights to co-ordinate this strategy on discrimination on any of the grounds that we are talking about. We need a categorical assurance from the Minister that, when functions are subcontracted to bodies such as private companies or charities, those bodies will be subject to the same duty under Section 71 of the Race Relations Act 1976. It will not only be the contractors that will be the subject of this matter, but also the subcontractors in many instances.

Like many other noble Lords, I believe that black groups are massively over-represented in our criminal justice system. A quarter of the male and female prison population is from black and ethnic minority communities, against a representation of about 7 per cent in the general community. To an extent we have created this anomaly. Almost all the sentencing research that I have looked at points to the disadvantages that these communities face in the criminal justice process. That applies equally to pre-sentence reports, as the noble Baroness, Lady Anelay, was good enough to mention. During my work, I have from time to time seen racial stereotyping within such reports, which could do a tremendous amount of damage particularly when sentencing methods are being considered.

There is still no clear strategy in the Probation Service for working with racially motivated offenders. What do we do about those people? That was observed by HM Inspector of Probation. These amendments would help to rectify the situation. More important, agencies would be required to pool clients to demonstrate that they understand equality before the law, because equality before the law is an essential part of our democratic institution.

I agree with everyone. Diversity is of great concern within the criminal justice system. The noble Lord, Lord Dholakia, knows that I share with him an anxiety about the way in which matters have developed and an absolute commitment to bring about creative and effective change in that area. Clearly there is room for improvement, but I know that the issue is taken extremely seriously by the Probation Service and that there has been concern that the progress and achievements of recent years should not be lost under the new arrangements. I can assure your Lordships that I am absolutely determined that they should not be.

I believe that the new arrangements will assist us in this regard. The benefits of commissioning include, for example, a clearer focus on the offending-related needs of the offender, an innovative tailored service provision and the delivery of more relevant and equal services to offenders, irrespective of their race, gender or other characteristics, to achieve greater parity of outcomes. Today I attended a meeting of the national independent advisory group which was looking at guns and gangs and I had a clear conversation with Dr Derek Campbell. He made the point that organisations, particularly not-for-profit organisations, which specialise in dealing with black and ethnic minority people and those with disabilities want an equal opportunity to engage in work with such offenders. They have demonstrated the benefit of specific assistance: it improves outcomes. We are returning to an outcome focus. I assure Members of the Committee that we see that as critical.

Commissioners will set out diversity expectations in the service delivery and the way in which those should be monitored. The commissioning framework to which regional commissioners and providers are currently working sets four priority areas, of which diversity is one. I can give the noble Baroness, Lady Anelay, the assurances she seeks. We looked at what was requested by the CRE and decided that it was necessary to go further because we understood the import of what it wanted to achieve. The aim is to deliver greater equality of access to services provided for offenders in prison, or supervised in the community, irrespective of their race, gender or other characteristics; to achieve greater parity of outcomes where that is not the case; and to promote greater confidence in the criminal justice system among those groups where that is lacking or is weak.

I turn to the specific amendments, beginning with that tabled in my name. Section 71(1) of the Race Relations Act 1976 requires a list of bodies specified in Schedule 1(a) to the Act to have regard to the need to eliminate unlawful racial discrimination and promote equality of opportunity and good relations between persons of different racial groups. Probation boards are currently listed in the schedule. The purpose of our amendment is to require probation trusts and other probation providers other than the Secretary of State or a probation trust to adhere to the duty in Section 71(1), so there is no "get out of jail" clause so far as that is concerned.

The noble Baroness, Lady Anelay, and the noble Viscount, Lord Bridgeman, have tabled an amendment along similar lines. I am grateful to the noble Baroness for doing so because it enables me to give her the affirmation she seeks and for us to have a useful debate. However, I hope that the Committee will accept that the government amendment is more robust and goes a bit further. Amendment No. 41 would simply enable the Secretary of State to use the contractual or other arrangements under Clause 3 to authorise or require a provider to adhere to the race equality duty. The government amendment, on the other hand, places the duty directly on the probation trust and any other provider other than the Secretary of State carrying out functions under contractual or other arrangements made under Clause 3(2). It offers greater clarity and more certainty about what is expected.

I turn now with pleasure to the amendments tabled by my noble friends Lady Gibson and Lady Turner. The amendment seeks to apply the disability and equality duties to probation under the new arrangements. It is of course our intention that probation providers should adhere to the gender and disability equality duties under the new arrangements. This is one of a range of consequential amendments to secondary legislation—I should remind the Committee that this is currently in secondary legislation—which we will bring forward at the appropriate time prior to implementation using the power in Clause 35. We have chosen to deal with the race amendment on the face of the Bill because of the significant interest shown in this issue during its passage to date through both Houses so that Parliament can be reassured about the way in which we propose to handle the other consequentials. We envisage dealing with the gender and disability duties in a similar way.

Perhaps I may reassure the noble Lord, Lord Low, that this is not the only opportunity I have had to listen and accept amendments. As we go through the Bill we will bring forward a number of other amendments which give voice to the concerns that have been raised in Committee and, indeed, when we went through the earlier stages of other Bills. This is a valuable opportunity and we believe that we have taken a sensible approach to this matter, one that demonstrates the unity of the Houses in their commitment to equality in matters of gender, disability and race. I strongly commend our amendment to the Committee. In so doing, I hope that I have given satisfaction, if not pleasure.

I welcome that positive response, as I am sure do all other noble Lords. Perhaps I may clarify one point. Do I understand from the noble Baroness's response that she proposes to deal with race equality on the face of the Bill, but gender and disability issues in secondary legislation? If I have it wrong, I apologise; but if I have picked it up correctly, why is the Minister differentiating between the three duties in this way?

The issue of race has been a matter of particular and acute concern in the criminal justice system for quite some time. There is an acknowledged disproportionality in the representation of those from the black and ethnic minority communities in the criminal justice system. No such clear disproportionality exists in relation to either gender or disability. These matters are properly dealt with in secondary legislation, and there will be other equality issues as a result of the duties laid upon all the agencies. Further consequential amendments will flow, and we think it would be better to brigade them all together in one place and deal with them when we address the power which we hope will be given to us in Clause 35. That is the most effective way of dealing with this. I hope that the Committee will accept our total commitment to ensuring that the full import of both gender and disability duties will bear on this Bill.

I yield to no one in supporting measures taken to address issues of adversity in relation to race but the Minister will have appreciated my point about disability often appearing as a Cinderella. Disabled people often feel that their particular concerns are overlooked. Will the Minister take the opportunity between now and our later debates to reflect on that and consider whether disability and, I doubt not, gender could be dealt with on the same basis as race?

I will be brief because we have all been on the same side. I recognise the superiority of the Minister's amendment. When I introduced my amendment I explained to the Committee that I had withdrawn several other amendments in order to give the Minister the lead. I have now been able to secure the agreement of the noble Lord, Lord Judd—who made no difficulty in the matter; I was just unable to contact him—on ensuring that our joint Amendment No. 54 will also not be moved so that the Government may have the lead on that group too. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

I thank my noble friend for accepting my amendment in the way that she has.

[Amendment No. 41A not moved.]

moved Amendment No. 42:

Clause 3, page 3, line 35, at end insert—

"(3A) The Secretary of State may make provision for the performance of any function to which section 2(1)(c) applies by making arrangements under subsection (2) providing for the delegation of that function to the other person."

On Question, amendment agreed to.

[Amendment No. 43 not moved.]

moved Amendment No. 44:

Clause 3, page 3, line 37, leave out from "himself," to end of line 40 and insert "he shall make arrangements for the making of that probation provision (and for the avoidance of doubt the members of staff through whom he may act in making and carrying out those arrangements include prison officers or other persons employed at a prison)."

This is a straightforward drafting amendment proposed by parliamentary counsel which has no substantive effect; it merely improves the wording of Clause 3(4). I have a feeling that it may have been stimulated by something one of your Lordships said in an earlier debate.

We have made it very clear that we anticipate that the Secretary of State will fulfil his responsibility for ensuring the provision of probation services by making contractual or other arrangements with third parties. That is what we are seeking to do in moving the amendment. However, Clause 3(4) allows for a further option, that of the Secretary of State making provision directly through his own staff rather than through contracts with other providers.

The subsection does not restrict which staff that might be but makes clear that, if necessary, it will be possible for probation services to be provided by the Secretary of State acting through prison staff. For example, in some circumstances it might make sense for prison staff who are delivering a programme in custody also to deliver the same programme in the community to offenders with similar needs to those in custody. It might also enable some offenders to continue a programme started in custody after release. This could be very helpful in supporting the end-to-end management of offenders and is an entirely sensible approach. The amendment clarifies that the Secretary of State could carry out these provisions either in person or acting through his staff and it makes clear that the definition of "staff" includes, but is not restricted to, prison officers or other persons employed at a prison.

It is perhaps unwise to say this but it is an entirely sensible amendment and I am sure that entirely sensible noble Lords will wish to support it. I beg to move.

My Lords, I may be one of those voices raised in the desire to have some reference made to prisons and prison staff as crucial and central to the business of end-to-end offender management. I agree that that amendment is extremely sensible.

On Question, amendment agreed to.

[Amendments Nos. 45 to 47 not moved.]

moved Amendment No. 48:

Clause 3, page 3, line 46, at end insert—

"(6) In carrying out their functions under this Part, and in particular in providing any assistance to the courts and to the Parole Board for England and Wales, providers of probation services and their officers shall ensure that such assistance does not give rise to any conflict of interest between their obligation to give such advice impartially and the financial interest of the provider."

The amendment addresses the danger that a conflict of interest may arise in the provision of services by a system of tendering for contracts under the contestability system. Concerns have been expressed throughout the debates on the Bill, within Parliament and outside it, about the conflicts of interest that could arise in certain circumstances, and my amendment seeks to find a way around that.

The prime example of where a conflict might arise is where the same party is responsible for writing reports for the court as well as providing the services that might be recommended in those reports. The fear is that the party might be tempted to support its own services and generate business in that way.

At the moment, the preparation of court reports appears to be protected from contestability, at least for the time being, by Clause 4. But of course that protection may be removed at some stage by secondary legislation under Clause 12. Once that has happened, there is a distinct possibility that a conflict of interest could arise.

It is obvious that if a recommendation is made in a report to a court for a particular disposal, there must be no hidden interest in it. At present, it is not possible for that to happen since the reports are prepared by members of Napo, but in the future, if reports are prepared by private companies or voluntary organisations whose business is also the running of programmes of rehabilitation, it is just possible that a conflict of interest could arise. I am grateful to the National Association of Probation Officers for its helpful briefing and its support for the amendment.

The amendment would add a new subsection to Clause 3. It imposes good practice on the providers of probation services with regard to the avoidance of a conflict of interest. I beg to move.

It is hardly necessary to add to what has been said by my noble friend, who has set out the position very clearly. There will be the opportunity for conflicts of interest to arise under the new system and precautions must be taken against that happening; otherwise there may well be challenges in the court.

My noble friend is entirely right: a company running prisons or an electronic tagging scheme might also be commissioned to write court reports. A recommendation that somebody should be tagged could, if implemented, result in money going into the pocket of the provider which could, in turn, lead to challenges in court as to the fairness of the trial. I invite the Minister to recognise that there is a problem here; if we are to avoid court challenges, something should be added to the Bill to make it plain that these conflicts of interest should not be allowed to arise.

I support this important amendment which seeks to address the conflicts of interest which may arise from introducing contestability into the process of providing probation services. Specifically, if the providers come from the private sector, their services will be related to the profitability of the organisation and their need to justify their effectiveness and financial management to their shareholders. As professional providers of a service, it is fundamental that the advice they give should be absolutely impartial and disinterested. There should not be the faintest suggestion or implication that such advice is driven primarily or in part by any financial interest to them.

Profitability is clearly a key driver in the management and administration of any private company. The integrity of the organisation must be beyond question and at all times their services must have the best interest of the client groups as the central focus. Their profitability should not be seen to be at the expense of professional standards and best practice. We have just heard about the risk of a potential conflict of interest that exists if advice is given to a court by a private provider whose business will benefit if it is taken, or if a probation trust signs a contract with a private company for its services and has a judge or a magistrate as a member. Will the Minister clarify this issue?

Where contestability is part of a bidding process for the provision of services, the providers will seek to demonstrate that they can provide better services at a better rate and represent better value for money than other bidders. To many people, this bidding process does not lie easily with putting the needs of beneficiaries of a service first, be they victims, offenders or the community. Clearly, there has to be some guarantee of high standards where best practice can be demonstrated first. There is a delicate and often difficult balance to be struck here, and it is uncharted territory where criminal justice issues are concerned. In their document Reducing Crime, Changing Lives, the Government stated that their interest in the process of contestability lay in getting,

"the most cost-effective custodial and community sentences, no matter who delivers them".

This process has been in operation in the private prison sector, where four different companies run nine prisons. The process has been perceived to have had the effect of forcing the public sector prisons to raise their game, reduce their costs and win contracts from their private sector competitors. While this was seen to be true in the early days, some private prisons have in the recent past received seriously critical inspection reports. Indeed, one of them was the subject of a truly shocking television programme. It has been stated that contestability has reduced costs in prisons by worsening terms and conditions for staff and increasing workloads and hours worked. Those which were performing badly were found by Her Majesty's inspectors to have dangerously low staffing levels. It is axiomatic that best practice requires that staff work on a one-to-one basis to achieve the best outcomes. To cut down staff will inevitably lead to poorer outcomes. As we now know, salaries are generally lower, the level of training poorer and the changeover of staff higher than in the public sector. I would therefore suggest that they are no longer necessarily the best comparators.

The Government's contestability prospectus cited six different types of contestability programmes which could be used: contests held to commission alternative provision if existing providers fail to provide or deliver a satisfactory improvement plan; market testing; extension of partnership working and sub-contracting; competitions to run new businesses; pathfinder projects to find new solutions; and new competitions for previously competed services.

Historically, the Probation Service has always worked in partnership with the voluntary sector and the private sector. The target set by the Home Secretary for contracted-out services to increase to 10 per cent will only take us back to the situation that prevailed before 2001. It is not seen as a problem; nor do we on these Benches have a problem with the idea that we should tap into as wide a range of probation providers as possible, including the voluntary and private sectors, to enhance and develop standards and the ways in which we can reduce reoffending and make our society safer. More effective case management and better-targeted interventions should be a constant goal for providers. However, as we have argued elsewhere, this is not a conventional market as it is understood by the private sector. Evidence—we have been talking a lot about evidence today—that contestability achieves the desired results is thin on the ground to say the least.

We therefore have strong reservations about the idea that contestability and the sometimes crude battles of the market place are an entirely appropriate means of meeting the needs of often very vulnerable people.

We entirely accept that it is essential that all players in the field are encouraged to raise their game and the standards of practice as well as principle, which is why we have consistently argued for the development of partnerships in the provision of probation services. I have cited how the Scottish model has worked and argued for the duty to co-operate between agencies in England and Wales. We have heard how such an ethos exists in children's services and issues of racial equality. It applies in youth offending teams and MAPPA. It is an approach that sits more comfortably with the nature of the work in which all these agencies are engaged. A client needs best practice in achieving the highest standards, which are not necessarily achieved by pitting organisations against each other—especially when a multiplicity of bodies is engaged in the process. We cannot risk losing all that we think is best or, as the noble Lord, Lord Judd, said, throwing the baby out with the bathwater.

I entirely support all that has been said in this debate so far. However, rather than simply trying to legislate against conflicts of interest, which does not entirely remove the conflict of interest, there are some aspects of the Probation Service that it is simply not appropriate to put into private hands. The writing of pre-sentence reports may well be one of those aspects. I would go a little further even than the amendment and ask whether allowing all the different functions to be discharged privately is not perhaps throwing the baby out with the bathwater. Should certain things not be done by the justice system in the public sphere?

I, too, support the amendment. The Bill envisages far greater involvement of the private sector in providing a probationary service. In these circumstances, it is essential that the Government should ensure that there is no conflict of interest. The amendment, as a number of speakers have indicated, would eliminate the risk of a conflict of interest should any area of probation work be contracted out to a company with a financial interest in the outcome. It would be wise to have an amendment with wording of this kind in the Bill to make it absolutely clear that the Government have taken all the steps that they possibly can to avoid any conflict of interest in this new arrangement.

I support the amendment, but before speaking to it I must apologise to the Committee for some wrong information that I gave on Monday, which the Minister with her habitual acuity—to use one of her favourite words—picked up. I said that the London Probation Service had issued warnings to 60 per cent of its staff. In fact, I should have said 60 personnel. I misread my notes, and I apologise for that. The worry, though, is that those 60 personnel include some very senior members of staff, which is the onus of my concern.

Previously, one strength of the Probation Service was that it was responsible for both offender management and interventions. The introduction of NOMS has separated the two. Whereas the tasks connected with offender management appear to be left more to the public sector, the intervention tasks seem more often to go out to contracting. I wonder if that is not a difficulty that might not be revisited. As the right reverend Prelate said, a clearer statement of which probation services should remain—not just for three years but for ever—might remove this problem.

I thank the noble Lord, Lord Ramsbotham, for his apology in relation to what he said on two or three occasions last time the Committee met. It is clear that 60 per cent differs very greatly from what is less than 2 per cent of the London probation staff, and no reference is made to front-line staff. Indeed, front-line staff will not be affected by any redundancies. The posts are being considered for redundancy from within senior management but will not necessarily amount to 61. I am very grateful to the noble Lord for apologising for misleading the Committee.

Court work has been an area of particular interest and concern as the Bill has progressed through the other place and here. I remind the right reverend Prelate that Clause 4—an amendment which was made in the other place—now gives real relief. It goes directly to the point that he makes. Clause 4(2) states:

"In this section 'restricted probation provision' means probation provision which—

(a) is made for a purpose mentioned in section 2(1)(a) or (b); and

(b) relates to the giving of assistance to any court in determining the appropriate sentence to pass, or making any other decision, in respect of a person charged with or convicted of an offence".

That provision will stay in place unless and until it is changed by an affirmative resolution made by both Houses. Therefore, the assurance that the right reverend Prelate seeks in relation to pre-sentence reports is catered for.

Several Members of the Committee mentioned an anxiety. It was mentioned by the noble Lord, Lord Waddington, echoed by the noble Baroness, Lady Linklater, and supported by the noble Lord, Lord Ramsbotham. There is no difference between us on the necessity to eradicate any form of conflict of interest. However, the right reverend Prelate is right that one cannot legislate for that in the way that is proposed. I say to the Committee as lightly as I can that some in the voluntary sector assert that the Probation Service already has the opportunity both to write reports and to carry out the work. Some in the voluntary sector believe that they could do that work more effectively and appropriately and achieve better outcomes. Because there is no lever to oblige the Probation Service to act in partnership, it does not have the opportunity to do so. Those not in the public sector, particularly those in the voluntary sector, have asserted that there is a monopoly through which the Probation Service is able to write the reports and then to guarantee that it—a public sector body—also does all the work. I am not saying that one side or the other is right. However, it depends on where you stand as to whether you think there is a conflict of interest here. We want no one to have that conflict of interest.

I understand that there is genuine anxiety about the risks of a conflict of interest arising if one organisation—no matter which it happens to be—both proposes and provides outcomes for offenders. There is concern that its advice might be skewed towards those outcomes which it provides. But bearing in mind what I have just said, we may be making too much of this. After all, we have that situation under the current arrangements.

A number of safeguards are therefore in place to ensure that pre-sentence reports are developed appropriately. First, when the court requests a pre-sentence report it also provides an indication of the expected sentencing outcomes, so that the report can be focused accordingly. Secondly, the report must then adhere to national standards, which we will discuss in more detail under a later set of amendments. Thirdly, there is clear guidance on the type and structure of report to be provided, based on the seriousness of the offence and the appropriate response.

More generally, the development of a more holistic performance management framework, coupled with the introduction of commissioning and contractual relationships, will bring greater transparency to the process and make it easier to spot any potential difficulties.

However, I understand that there is still anxiety that these risks might increase if non-public sector providers were involved. As I have indicated, I am not sure that that is the case, but I understand that anxiety. Certainly, all the standards and guidance I have just mentioned would apply to all providers, from whichever sector they came. It is absolutely critical that we have parity of treatment.

But in any case, as I indicated, non-public sector providers will not advise courts in the foreseeable future. As I made plain, that is the effect of Clause 4, which prevents the Secretary of State contracting with a non-public body for the giving of assistance to courts. This restriction can be lifted only by means of an order subject to affirmative resolution. I assure the Committee that, before that could be done, one would have to produce cogent information to persuade both Houses that it was appropriate.

The statutory restriction does not cover the Parole Board. However, this area of work is covered by the commitment we have previously given; namely, that for the next three years we will let contracts for offender management only with the public sector. Advising the Parole Board is an important area of probation work, but the service produces far fewer parole reports than it does court reports, and we think that the risks of genuine conflicts of interest are fewer.

However, if the Government ever seek to lift the restriction in Clause 4, I accept that the conflict of interest point will need to be addressed. But it will require more than a clause in this Bill. It will require practical measures which take account of the state of the market, the nature of the providers, the contractual provisions, incentives, performance management arrangements and so on. The Government would need to provide details on these issues in order to secure the support of the House. If I have learnt anything, I have learnt that much.

However, we are not yet at that point. It is helpful to have the opportunity to discuss these issues, but the clause is neither necessary now, nor does it provide sufficient safeguards for the future. On that basis I invite the noble Baroness, Lady Anelay, to withdraw the amendment, confident, as she must be, that these important issues would need to be addressed.

They are indeed important issues which need to be addressed. The right reverend Prelate properly pointed out that there are concerns about the core issues and their protection. The Minister directed him to Clause 4, but his point is still relevant to my amendment. I say to the right reverend Prelate that my amendment seeks to address the Bill as it is now. That is why I have pressed ahead with the amendment. That is relevant to the Minister's argument. She says that I do not need to trouble myself about this matter now because the non-public sector is not yet giving advice to the courts, although it may happen in the future. She recognises that a conflict of interest may need to be addressed later. However, I am looking at the Bill as it stands. This is the only opportunity I may have to address good practice in the Bill.

The Government have given an assurance that they will not seek to bring a statutory instrument before the House for three years, but after that it becomes open season, irrespective of the rigour with which the House may scrutinise an affirmative instrument. We would be entering uncharted waters with regard to contestability. I am very grateful to Members of the Committee for their support and for the caution that they exercised in what they said about contestability. The Minister says that in the future the process will be more transparent. However, the Government themselves argue that, given the necessity for commercial confidentiality with some of the contracts, they will not open up that process to parliamentary scrutiny and so there will be difficulties.

I accept that one cannot, by any legislation, legislate away conflicts of interest. I also argue that one cannot by legislation move out of public life everything that is wrong in the world; but we all have a go at it. Otherwise, we would not be sitting here debating what is the more than 60th piece of Home Office legislation since 1997. We keep trying. In my fairly brief amendment, I am seeking to put some clarity in the Bill about a duty to avoid a conflict of interest. It is important and, on this occasion, I wish to test the opinion of the Committee.

On Question, Whether the said amendment (No. 48) shall be agreed to?

Their Lordships divided: Contents, 114; Not-Contents, 94.

Resolved in the affirmative, and amendment agreed to accordingly.

Clause 3, as amended, agreed to.

[Amendment No. 48A not moved.]

moved Amendment No. 49:

After Clause 3, insert the following new Clause—

"Charities

(1) In making arrangements under section 3, the Secretary of State shall ensure that no less than seven per cent of probation services, measured by the financial cost of services, shall be provided by charities within the meaning of the Charities Act 2006 (c. 50).

(2) The Secretary of State shall be order specify requirements which shall apply to—

(a) contractual arrangements which the Secretary of State may make with probation trusts or with any other person for the provision of probation services and for the operation of approved premises; and(b) sub-contractual arrangements made with charities by probation trusts or by any other person with whom the Secretary of State has made contractual arrangements for the provision of probation services.

(3) The requirements specified by order under subsection (2) above shall include requirements that payments to charities under such contractual or sub-contractual arrangements shall reimburse those charities for the full cost of the services which they provide.

(4) In determining with which persons he will make contractual arrangements for the making of probation provision, the Secretary of State shall have regard to the arrangements made by those persons and their sub-contractors for the promotion of equality in respect of race, gender, disability, sexual orientation, age and religious belief.

(5) An order under this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament."

I declare an interest in that for nearly 25 years I have been associated with Nacro, the National Association for the Care and Resettlement of Offenders, which has considerable interest in the amendment. Equally, the Government's emphasis on voluntary organisations effectively means that Nacro would very much benefit if the amendment were to be carried.

The new clause requires that at least 7 per cent of probation budgets should be used for services provided by charities, that contracts with charities should provide full cost recovery and that decisions to award contracts should take into account providers' arrangements to ensure equality and diversity in their operations. On that point, I have no difficulty, given that I have received appropriate assurances from the Minister.

At Second Reading, there was unanimity across the House that voluntary organisations play a vital role in the rehabilitation of offenders. In particular, the sector has expertise in delivering high-quality services in accommodation, employment, education, monitoring, addictions, mental health, working with offenders' families and community engagement. Those services are crucial to the reduction of reoffending. For example, the likelihood of reoffending by ex-prisoners who obtain and keep a job is cut by between a third and a half, depending on which research study you look at. Getting offenders into stable accommodation reduces their reoffending rate by at least a fifth. Ex-offenders with support from a family are reconvicted at a rate of between a half and a sixth of similar offenders without family support. One study showed that offenders who receive educational help reoffend at a third of the rate of similar offenders who do not receive such help. Involving offenders in drug rehabilitation reduces the volume of reoffending by about 70 per cent.

These effects are interrelated; for example, it is harder to get a job without basic skills and it is harder to get one if you are homeless. Offenders who are homeless and drifting are less likely to sustain the motivation to complete a drug rehabilitation programme and to change their offending behaviour. NOMS has developed targets to get more offenders into employment and sustainable accommodation, to improve offenders' education, and to involve them in drug treatment programmes. If these targets are to be achieved, the involvement of voluntary and community organisations will be crucial.

Yet, the history of the past few years has shown that the Probation Service has often been reluctant to engage the voluntary sector in partnerships, except when it has been required to do so, either by legislation or by centrally driven targets. Until 2001, the Probation Service had an official target of devoting 7 per cent of its resources to partnerships with the voluntary sector. While it never quite achieved that percentage, the target pushed up the proportion of the service's budget devoted to such partnerships to around 5 per cent. However, the 7 per cent target was removed in 2001. After that, the proportion of probation budgets spent on contracts with the voluntary and private sectors combined plummeted to less than 2.5 per cent. That cannot be a healthy sign for voluntary sector involvement in probation work and does not project a happy picture.

Faced with the threat of contestability, the Probation Service has, somewhat belatedly, begun to remedy this. It has adopted a target of devoting five per cent of its budget in 2006-07 and 10 per cent in 2007-08 to partnerships with the voluntary and private sectors. As a result, the proportion of probation budgets devoted to such partnerships has now increased to around 4 per cent. So we are seeing some progress, but not sufficient to meet the objective set by the Government.

However, there are two reasons why it would be preferable to put on the face of the Bill a requirement for a specified percentage of probation budgets to be provided by the voluntary sector. First, the Probation Service's recently adopted 10 per cent target is not a statutory requirement. There is nothing legally to stop the service from reversing this policy, abandoning the target and reverting to the position where a derisory proportion of its budget was devoted to partnership with the voluntary sector.

Secondly, the service's non-statutory 10 per cent target applies not only to contracts with charities but includes contracts with the private sector. It would be theoretically possible for the service to meet this target by devoting 10 per cent of its budget to contracts with Serco, GSL, Group 4 Securicor, Reliance, Calyx and other private providers and having no contracts with the voluntary sector at all. Many charities fear that private sector agencies will win contracts in preference to voluntary organisations, not because they are better at the work but because they have more resources. This means that they can put teams of people on to the intensive process of writing bids and can produce attractive bids at short notice, which charities cannot do, given their more limited resources.

By specifying a minimum level of contracts with the voluntary sector, the new clause would guard against the risk of the voluntary sector's unique contribution being squeezed out through this process. Put simply, experience shows that the Probation Service is unlikely devote a significant percentage of its budget to voluntary sector partnerships unless it is required to do so—and the amendment would ensure that.

The new clause also requires that contracts with charities should reimburse them for the full cost of their services. One problem is that, all too often, statutory funders have been unwilling to reimburse charities for a realistic proportion of their overhead costs, such as financial administration, IT costs, human resources and staff training, which are necessary to provide services effectively. NOMS has recognised the need to remedy this in its policy statements. For example, the NOMS document Improving Prison and Probation Services: Public Value Partnerships included a commitment to:

"Contract terms which recognise the principle of full cost recovery, ensuring that publicly funded services are not subsidised by volunteers or other funding".

Policy statements are all very well, but experience shows that they are not always translated into practice when procurement processes start. For several years now, successive versions of the Government's compact on relationships between the Government and the voluntary sector have required contracts with the voluntary sector to provide full cost recovery and to guarantee funding for a minimum of three years. Yet the Charity Commission recently found that the majority of contracts between government departments and charities do not provide full cost recovery and last for only one year at a time. Unless a requirement for full cost recovery is written into the Bill, there can be no guarantee that the stated intentions of policy documents will become a reality.

Finally, the new clause requires that, in awarding contracts, the Secretary of State should take into account the arrangements which providers make to promote race equality. As I said, I am delighted that we have an assurance from the Minister on that matter.

The work done by voluntary organisations and, in particular, Nacro, in assisting in the resettlement of offenders over all these years comes to hardly anything when, over a period, insufficient funds are made available and grants are cut at the whim of the Government. We have seen example after example of notices being issued to hundreds of staff who have been unable to maintain a job or provide a service. It will be to the detriment of the Bill and the Government if we are not able to ensure that charities have adequate resources to create an effective partnership in probation work. I beg to move.

Although I shall be brief, I hope that the noble Lord, Lord Dholakia, will not underestimate my admiration for him for bringing forward this amendment. It has performed a valuable exercise in drawing our attention to the importance of charities and the work that they do. He will know from our debate so far that all sides of the House stand in admiration of that work. But we all still have ringing in our ears the thoughts of the noble Lord, Lord Judd, on an earlier amendment. I shall certainly wish to revisit the speech that he made in withdrawing his amendment, in which he urged caution in relation to the future role of charities.

It is clear that there are concerns about the lack of a guaranteed funding stream, which is currently made available to charities. Sometimes they receive pump-priming, they just get going and then, without completing their task, they find that the pump-priming is removed, often for very good reasons. It is given to them in the first place only on the basis of their finding replacement funding to continue the work, so there is no sleight of hand in this; the Government make it clear from the beginning that that will be the case.

Concerns have also been expressed that, when charities work in partnership with the Home Office, they are not always paid the full amount of the money promised to them at the beginning. That is carefully reflected in subsection (3) of the amendment, so I think that the amendment has some advantages. My concern is one that I know the noble Lord, Lord Dholakia, will understand; that is, as soon as one tries to put a budgetary percentage into statute, suddenly it becomes the ceiling. Therefore, 7 per cent would become the maximum, although I know that that is not what the noble Lord wishes. I am sure that he would want some flexibility, with the voluntary sector getting more than 7 per cent if appropriate. I am sure that, at this stage, this is a probing amendment and it gives us an opportunity to debate the matter but, if the amendment were accepted, it might well constrain and not expand the role of the voluntary sector.

The amendment is a very useful way of taking us forward. We will have to address in more detail at later stages what impact contestability will have on charities and on the deliverability of services.

I support everything that the noble Baroness, Lady Anelay, has just said. I am glad that the noble Lord, Lord Dholakia, has raised the issue of charities. Like the noble Baroness, I commend him for almost everything in the amendment, except that, again like the noble Baroness, I stick over the inclusion of the figure of 7 per cent. I do not like ceilings in these matters. Of course, charities will be part of the partnership and one would encourage that, but things may be changed in annual plans and there may be different opportunities in different places. I quoted the experience of the Youth Justice Board. You have to be certain that the providers will be there when you try to find them, and they may not be.

I am particularly glad that subsection (3) was mentioned. Although I am sure that the noble Baroness has seen it, I draw to her attention a report by the Charity Commission entitled Stand and Deliver, which was published in February 2007. It contains some very disturbing information from the charity sector about how few charities—only 12 per cent—are paid in full in government and public sector contracts. The commission goes on to speculate that this is bound to affect the willingness of charities to become involved in this sort of work in case they are not paid, because they simply cannot afford to go on in that way.

The Charity Commission also issues a caution. It says that charities must bear in mind that the mission which allows them to have charitable status must not be strayed from. If they enter into contracts with commissioners in the public sector, there is a danger that the requirements of the commissioners will affect that mission. If that happens, their charitable status will be at risk and the trustees will be liable.

Attention to all this has been carefully drawn together in a splendid report by Clinks, a hugely reputable and successful organisation which welds together voluntary sector support. Of course, the bigger charities are more able than the smaller ones to withstand this sort of commercial pressure, but it is the small, local charities all over the country that deliver a very large amount of the valuable work which I suspect probation supervisors, in particular, will need in supervising the low-level offenders for whom they will be responsible.

As I said, I am enormously glad that the amendment has been put forward but I have concerns about specifying a figure of 7 per cent.

I am amazed by what I have heard. I do not fully understand what is meant by "contestability". I should have thought that, if the service provided by the voluntary organisation was better, it would be in a position to negotiate a better deal. Furthermore, I am not entirely clear what "commissioning" means. I should have thought that it meant entering into a contract with the sub-contractor to do the job. It would be very careless of the charities if they did not ensure that the contract provided for the period of funding and the terms of withdrawal and so on.

Like many other noble Lords who have served on charities, I am afraid that it is all too easy to recognise the scenario of waiting to see whether your contract will be renewed, knowing that the money paid will not exactly match the full cost of what you are providing. So I have a great deal of sympathy in that regard.

I, too, share the concern expressed by the noble Baroness, Lady Anelay, and my noble friend Lord Ramsbotham about some aspects of what is proposed. I point out that the low percentage of contracts with charities, which was perfectly fair in the early part of this century, was certainly not a desirable aspect of the relationships that the Probation Service had with those charities. However, as the noble Lord, Lord Dholakia, said, the figure is going up. All the signs in the documents that we have seen are that the charities also wish to embrace the partnership approach.

There is a danger in setting specific targets. As has been acknowledged, many targets may not have been kept to when they were set in the past. It may be better not to push the matter to a vote at this stage but to take very careful note of what has been said.

I totally support what my noble friend Lord Dholakia said about charities, although I noted the sensible cautionary tone in what the noble Baroness, Lady Anelay, and the noble Lord, Lord Ramsbotham, said about the risk of quoting a figure and it becoming a ceiling. But the principle, which I think is the key, is to ensure that there is a duty on the probation services to include a proportion of the voluntary sector organisations and charities, however that is worded in the Bill. Without that, there will be a risk of slippage. As we debated earlier, co-operation between agencies is also a very real duty. If it slips off the face of the Bill, it will slip off people's consciousness and affect the way that things are organised. After all, legislation is important in enunciating certain principles. If they are stated clearly in the Bill, they will be followed.

In general, I welcome this amendment. I want to refer only to subsection (4). I question whether absolute equality in matters of religious belief is wise. If a voluntary organisation sets out to benefit only the members of a particular religious belief, why should it not do so by working exclusively with offenders from that religious background? It may be able to work very effectively within its own faith community, so why should it be forced to offer its services to everyone indiscriminately?

I sense that this is the last of this afternoon's debates on this Bill. I shall not detain the Committee too long, but important points have been made to which I need to respond. I thank the noble Lord, Lord Dholakia, for putting the amendment before us, because it provides us with a very welcome opportunity to debate the process by which contracts should be let under the new arrangements that the Bill envisages for delivering probation services.

I start with a slight tease. In the past, I have listened to Members on the Liberal Democrat Benches berating the Government for setting too many targets, yet here we have a Liberal Democrat amendment setting a target. That is a novel experience; culturally, it is rather hard to adjust to.

I remind the Minister that I am using the Government's target. If he looks at what they have done, he will see that that is what I am trying to achieve.

I know that, and the noble Lord is right to point it out. However, I am slightly amused that he has tabled an amendment to follow the point through. We are making progress.

As with many of the amendments that we have discussed in Committee, there is much with which we agree. As my ministerial colleagues and I have made clear from the outset, we are absolutely committed to greater involvement by the voluntary and charitable sector in the delivery of probation services; that is the key motivation for this legislation. We believe that those organisations have much to offer in the fight against reoffending, and we have been hugely heartened by the support that many organisations have shown towards the proposals in the Bill; that support has been reflected in the content of the debates so far, not least on this amendment.

However, we differ from the noble Lord and the noble Baroness who contributed from the Liberal Democrat Benches on some points of principle and, in particular, on this. We do not believe that it is appropriate to set targets for the amount of work that should be delivered by any particular type of provider. We share some of the concerns that have been raised from the Cross Benches on that issue. We think that the guiding principle should be which provider is the best able to deliver the service in question. Our commitment is to a mixed-economy provision: what is best for the service and not from which sector they come.

As the noble Lord reminded the Committee, we have targets in place to encourage probation boards to make greater use of alternative providers in the delivery of services where that is more effective. We are doing that in response to the concern that the service is currently doing far too much in-house, as the noble Lord, Lord Dholakia, made clear in his comments. That is not a long-term solution, as my right honourable friend the Home Secretary made very clear in another place when he said:

"In future, we shall abolish the existing targets and replace them with an entirely different type of aspiration. In future, the aspirations—the targets—will not be based on the a priori assumption that there is a level of non-public sector work that must be carried out, whether or not it gives best value or is from the best provider. That would be a dogmatic approach that could unjustifiably force work out of the public sector. No a priori assumptions will be made under our approach".—[Hansard, Commons, 28/2/07; col. 1019.]

It is hard to argue with that, and I am more convinced of that argument the more I have listened to the debate.

I turn to other aspects of the amendment. Subsection (2) of the proposed new clause refers to the contractual arrangements that the Secretary of State may make with probation trusts or other providers and to the subcontractual arrangements that trusts and those other providers may make with charities. The contracts that are let by the Secretary of State will, of course, contain a substantial number of standard provisions. Work is currently under way to draw up model contracts in readiness for the establishment of the first trusts. But contracts are, by their very nature, the outcome of a process of negotiation between two parties in the light of circumstances at the time. For that reason, we argue that it would be entirely inappropriate to seek to impose elements of that contract by means of secondary legislation. The same goes for the subcontracts that trusts and other providers may make with charities, or indeed with providers in other sectors.

Subsection (3) has exercised a number of Members of the Committee this afternoon. It relates to arrangements with charities to make provision for full cost recovery. I understand those arguments. I, too, have been involved in charity organisations—I have worked in the voluntary sector—and I entirely understand why noble Lords have drawn attention to this. The Committee will be reassured to hear that we are fully committed to the principle of full cost recovery. Our intention is that that will be reflected in the tendering and contractual process, which means that the voluntary sector will be encouraged to submit bids that recover the full costs.

Subsection (4) would require the Secretary of State to have regard to the arrangements made by contractors for diversity issues. I heard the note of caution sounded by the noble Lord, Lord Hylton. We have already discussed the importance that we attach to this matter and the fact that the relevant duties will be placed directly on providers by the legislation. I confirm that potential providers' records on these issues will be considered as part of the process of assessing bids. That is a powerful statement, because we would be able to look at and measure the record of those who aim to enter this provision area.

To summarise, the Government are very much opposed to the idea of targets for which services should be delivered by which sector, but we are firmly committed to greater involvement of large and small organisations in the voluntary and charitable sectors and we are working hard to ensure that the right systems are in place to enable them to make a full contribution.

It is only fair to record that the voluntary sector is helping us to get this right and is fully engaged through our various stakeholder and advisory groups, including the voluntary sector and faith alliance. We are developing a strategy for building the capacity of the third sector to shape and deliver services and we are working with government departments to remove barriers by simplifying and streamlining regulatory and reporting requirements. Often the complaint is that those requirements are too constraining. We aim to deal with that issue. Our National Provider Network will inform commissioners of existing and potential providers and enable us to communicate opportunities to providers as they arise.

The noble Lord, Lord Dholakia, made another point, which I may have missed. I believe that he expressed concern that, without a target for subcontracting for the voluntary sector, the Probation Service simply will not do it. I understand that point. It is why we are using the commissioning structure set out in the Bill, so that the Secretary of State can use his powers, either to contract directly with other providers or to ensure that trusts and other providers do exactly that. We can tackle that important issue. With the powers that the Secretary of State will have vested in his office, it will be possible to make that critical intervention, thus ensuring that the subcontracting process for those services is effective in reaching out to other providers and in involving them more fully, so expanding that role, as the noble Lord argued. I hope that the noble Lord will now feel able to withdraw his amendment.

While the noble Lord decides whether to withdraw his amendment, I shall make one point. It seems to me that part of the problem is that we have a negotiation between a very powerful partner and perhaps a voluntary organisation that is an extremely weak partner in the negotiation. I wonder whether the department might be prepared to consider having a small department to advise voluntary organisations in their negotiations so that they get a fair deal.

I thought that I covered this in my contribution, but I may not have made the point. It is our intention to encourage and provide support, which is why there will be a national network and support at the centre to underpin the commissioning and contracting process. Experience demonstrates that when that is there, it can work very well. It will bring on the strengths of those smaller providers, such as flexibility and imagination in provision.

I thank the Minister. I say to the noble Baroness, Lady Howe, that it is not my intention to test the opinion of the House. The noble Baroness, Lady Anelay, was right that this is a probing amendment.

The noble Lord, Lord Ramsbotham, and a number of other noble Lords expressed concern about the 7 per cent ceiling, but even when the Government had a 7 per cent ceiling we never reached it and it was reduced to as low as 2.5 per cent. An example of the impact of what the Government did is Nacro, which at one time employed hundreds of resettlement officers. It reached a position where it had to issue redundancy notices to people who provided resettlement services. Is it any wonder that we have 80,000 people in prison today?

Now that I know where the noble Baroness, Lady Anelay, and the noble Lord, Lord Ramsbotham, stand on this, I intend to get together with them to come up with the appropriate wording for voluntary organisations and charities. I will have discussions with the Minister in the mean time to see how we can move forward on this matter, but I may come back on Report. I am grateful for the excellent comments that colleagues have made, and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

I beg to move that the House do now resume.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.